Real Estate

What do to? Rot and mold basically everywhere in house

  • Last Updated:
  • May 4th, 2021 6:30 am
Deal Guru
Mar 20, 2003
10456 posts

What do to? Rot and mold basically everywhere in house

Wasn't sure whether to post here or home and garden but since it's mortgage and money related I posted here- and I apologize for the long read.

This is the sequel to something I asked a couple of years ago where as background my wife using her company bought a mini-home/trailer on PEI for her sister to then sell to her when her situation improved, which it did so the sale happened maybe 1.5 years ago.

Long story short, the house has turned out to be so full of mold and rot it is basically no longer habitable without taking down every single wall to the studs while replacing most of those too, replacing the floors, ceiling, windows&frames, etc. There is maybe 100 square feet out of the 1100 or so which is not riddled with mold/rot. I figure we're talking at least 75-100k to bring it up to a livable standard but considering there was so much mold I see a risk that some is missed and the problems return in a few years.

She had a contractor check who didn't think it would be so bad when he checked initially so he was doing work but he said it just keeps getting worse every wall he looks behind and he has other jobs to work on so he has quit the job. What he did however say is that it's clear the problems have been there for years and the ex-owner purposely hid the issues in ways that the inspector wouldn't know about or be able to see. Why he says that is the roof was replaced while it could not have been missed that the attic was full of mold and rot. They also added a new skirting where he said they used 3 inch nails and a bunch of them didn't even drill in anything due to rot on the frame, which would have been impossible to miss.

Fast forward to today, the sister has no money to fix this although my wife said she would pay for it- however I am dubious it's worth rebuilding and suspect if an inspector went to see it would be condemned. Not to mention if they do the work without a permit I don't know what this would do but my concern is this will blow up and even if it does get fixed that it will somehow backfire from inspection or something and end up condemned either way with my wife being the one to lose all the money.

I see 4 options:
1- Get an inspector/engineer to come over and see if it is salvageable and trying to fix it, or more than likely it would be condemned.
2- Walk away- declare bankruptcy and stop paying the mortgage because that is basically where she is. The only reason she isn't under is my wife is throwing her a life line.
3- Can the owner before my wife be sued for hiding all of this? Or would my wife be the one getting sued as she was the previous owner?
4- Sell it as is where is with the land and try to get as much as she can and then figure out how to repay the mortgage. (between her meagre savings and my wife covering the rest).

This isn't the right place to ask but the unknown in all of this is while I don't know the finances I believe she has a bit of money in an RRSP (from her divorce) while her salary is 14$ an hour + child support + child care benefit. With that would she even be able to declare bankruptcy? At this point what she needs is a fresh start- I can't see her ever owning a house again considering how prices have gone up but she'd have to figure it out and get an apartment or whatever.

Honestly I'm not even sure what I'm asking, does anyone see a way out of this? I don't know if the options I list are even plausible and I'm mostly staying out of this other than to support my wife but I'd love to have ideas to give her so she can get out of this mess.

Anyone have some advice they can share?

And thank you for reading.
7 replies
Deal Addict
Dec 5, 2009
1762 posts
Might want to talk to a RE lawyer and revisit the purchase agreement and documents. Maybe there’s a case for misrepresentation or negligence on behalf of either of the agents... it’s a long shot but best of luck...
Jan 22, 2021
29 posts
Have you tried title insurance or home insurance?
Deal Fanatic
Dec 12, 2009
5433 posts
Option 5
Price out a new replacement minihome/trailer. (Sounds like a prefab trailer home.)
That might help put $$ into perspective.
Deal Fanatic
Feb 4, 2010
6599 posts
Sorry to hear OP. What about home insurance? What was the house purchased and sold for and what is it worth now (approximately)?

Wish you all the best with the situation.
Jr. Member
Oct 10, 2020
113 posts
How is the land this property is on? Not sure how it is in PEI but if the land has promise would that be enough to break-even or take a small loss for your wife/SIL?
Deal Guru
Mar 20, 2003
10456 posts
Wife will talk to a lawyer today and she asked her sister to talk to the bank and a contractor to actually find the cost of remediating, gutting and rebuilding. A replacement would cost over 150k and the value of the land is maybe 25% of the value of the home when it's not falling apart. I'll suggest they go to insurance again considering they accepted to insure the house even after sending their own inspector.

Thanks for the advice, I got some answers/information last night from which I see there is no need for further answers or suggestions and I'm keeping my nose out of this.
Deal Expert
User avatar
Feb 8, 2014
26065 posts
Socially Distanced
This much mold means there is a water/humidity problem.
While i don't know if condemning the building and starting fresh or declaring bankruptcy or what is the best option here, the source(s) of the water is important to figure out.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people